Introduction Of KWCP

As Beijing's experienced financial advisory firm, we provide our clients with first class consultation. We use our extensive knowledge of the Chinese market to aid our clients in overcoming the unique challenges of achieving success in the Chinese and global markets. We work with our clients in any stage of their company’s development and strive to realize the success and longevity of our client’s business.

Offer comprehensive packages of value added services that incorporates all stages of company's development from the initial idea to the implementation of an exit strategy
Help clients maximize growth potential and raise equity or debt capital
KWCP uses a large pool of resources and a strong influence on the Chinese growth business community to launch our clients into the Chinese business community’s sphere
KWCP not only offers advice, but also forms a long term mutually beneficial partnership with our clients

Raising of Capital or Financing

Finding financing has become a challenging and rigorous process; inadvertently leaving out even one small step could shut your door to investors permanently. Our experience and transaction management expertise also allows us to minimize management time in this process and to accelerate the time to close. Our experience, active coverage and deep understanding of the venture capital/private equity community allows us to better position our clients for funding and maximize their chances of finding a successful investor.

Private Placement - At KWCP we have a strong network of private equity firms and Venture Capitalists with which to match our clients. We work with companies to develop their business, financial, and revenue models and unlock hidden enterprise value by thinking outside the box.

Placement & Distribution - The Firm has worked with companies on early stage, expansion capital and late stage pre-IPO private placement financings. Through the Firm's extensive venture capital/private equity/hedge fund network base, we are able to help companies maximize their options in terms of securing new sources of funding.

Financial Management

We work with you to build up a customized investment portfolio consistent with your investment goals and risk tolerance.

KWCP provides unbiased advice and clear, comprehensive reports detailing the structure and value of your portfolio. We align our efforts with your interests. We offer support services to help your portfolio manager spend more time each day doing necessary research and portfolio administration. Communicating with clients on a regular basis gives them an opportunity to more fully understand the long run effect of the investment decisions, and therefore they are more likely to be patient through the difficult times. The advantage of engaging a personal contact with KWCP is to
understand that we are constantly concerned about your investments.

Transaction services

KW Transaction Services professionals are focused on helping you derive optimal value from your transactions, ensuring that they are used effectively to achieve your strategic objectives, while also seeking ways to help you gain a competitive advantage within your market. Leveraging the knowledge of industry and functional specialists from across KW, the range of services offered includes:

Acquisition due diligence
Vendor assist
Vendor due diligence
Translation services
Bid support and defence
Carve-outs and separation
Integration planning and execution
Sale and purchase agreements

Mergers and Acquisitions

We have the ability to locate strategic counterparts for clients that will help enhance their growing business. Our extensive knowledge of the Chinese market gives us insights into which companies are a strong match that add to and complement each other. We provide a sound knowledge base with which clients are able to make accurate decisions about the rapidly changing marketplace. It is through this process that our clients can present an attractive and compelling business to prospective investors. More importantly, it is through this process where KWCP delivers value to clients, regardless of whether or not financing is received.

Financial Structuring

Even the small improvements we make can add substantial value. We help you familiarize and exploit the strategic potential of your financial structures and processes. Our team consists of financial expertise to help you identify the important financial issues and come up with answers that remain valid in the future. We deliver integrated concepts and solutions to help you boost operational efficiency. We can use international benchmarks to show you how to improve your financial performance by means of active working capital management. We help you align your strategy and core processes to generate lasting value (corporate performance management). We can work with you to develop a tax strategy that significantly reduces your global tax burden while ensuring you pay your fair share of taxes and maintain good corporate governance.

Loan Syndication

A combination of expertise in both asset valuation and syndication, KWCP is a dollar denominated Cayman Fund ("Fund"). The Fund has USD capital and can call up additional capital as required. The Fund invests in early stage companies in all business sectors in China however specializes in the sectors focused on by KWCP. The Fund likes to invest in early stage businesses and pre-venture financed companies. The investment "sweet spot" is 1,700,000 RMB thousand to 6.8 million RMB.

Risk Management

We have been developing inclusive strategies to manage the risk portfolios of companies across the country. This can help develop personalized alternative risk programs customized to your organizations specific insurance needs and capitalize on your organizations current risk management programs to increase profits and maintain the highest quality insurance coverage. We provide superior, client-specific, cost-effective services while maintaining the highest professional standards. Our long-standing working relationships with our clients speak to the quality of services that we provide and attest to the skill and responsiveness of our staff and our focus on client satisfaction. With national capabilities, we develop, deliver, and implement customized programs and services including underwriting, risk management and litigation management.

Budgeting of Capital

The capital budget cycle includes three continuing phases: formulation, enactment, and execution.

Corporate Advisory Services

KWCP corporate advisory practice specializes in strategic advisory services, marketing, business acceleration and transformation, corporate governance, organizational development and other areas designed to assist companies who are looking for ways to expand beyond their current level of organic growth. Our broad and comprehensive expertise enables us to provide firms with objective assessments of their current situation and devise effective strategies for new growth and revenue generation.

With our teams determination, our clients can and do expect more. We approach each client as a unique entity with a distinct perspective in its industry and market, and we find ways to exploit that perspective to improve the bottom line. We partner with each client, always aware of the special trust and confidence needed on both sides of the deal to maximize the potential of the company. We have extensive experience in both the private and public sectors.

Our Corporate Advisory services include:

Strategic Advisory Services
Marketing Strategies & Industry Positioning
Business Acceleration Services
Research and Due Diligence Advisory
Corporate Governance

Project Advisory Services

We offer long-term investments commitments. We use our expertise to assist other project investors such as power generation, transportation including air cargo transportation and associated infrastructures. We specialize in providing services from concept to commissioning, from pre-investment feasibility studies and appraisals to development of joint ventures and company formation. Providing professional services to international companies interested in projects in China, in areas such as power, telecommunications and manufacturing. Our input is to assist in the profitable and
economic implementation of projects in close co-operation with promoters and designated shareholders.

Asset Management

We combine the different areas of real estate expertise to help our clients, whether companies or private individuals, private or public sector, occupiers or investors.- Property Development, Investment Management, Transaction, Consulting, Valuation, Property Management.

Merchant Banking Services

At KWCP, we understand that in order for a company to realize long term success that it needs the capital to meet the growth challenges it faces now. Our Merchant Services can help your company meet its unique financial needs and company objectives. Our team of financial staff not only understand the Chinese financial system, but also have the competencies to create specialized solutions for your growth stage company.

Highlights

We work to find practical solutions to meet your unique financial situation
Our extensive knowledge of the Chinese market and expertise in growth companies enables us to work efficiently with the Chinese business system
We work to find practical solutions to meet your unique financial situation
Our extensive knowledge of the Chinese market and expertise in growth companies enables us to work efficiently with the Chinese business system
Increased access to funding: Through a successful IPO, the candidate gets an immediate access to secondary equity markets as well as potential debt issues.
Diversified Shareholder base
The company gets access to a broad pool of international investors, ensuring a diverse and balances ownership structure..
Enhanced profile and marketing leverage
The transition towards a public company will enhance the company’s global recognition brand as well as business reputation.
Greater employee commitment and recruiting ability
Align the employees’ interest with those of the company through stock option programs, which is often unavailable to public companies.
Shares as acquisition currency
Use its common shares to fuel its business expansion without using additional debt or asset liquidation.
Greater Transparency

Enhancement of firms’ corporate governance through disclosure standards and international control procedures
mandated by the SEC and other U.S. instutions.

In order to successfully issue its shares, the company has to meet at least one of three sets of NASDAQ’s listing
requirements, as well as the general listing requirements that prevail for all companies.
General listing requirements for all companies

Rules And Regulations

The Rules and Regulations for listing with the US Stock exchange exist to ensure that investors are safeguarded throughout their investment period. U.S. listed Chinese companies must comply with similar rules and perform intensive analysis prior to listing.

The purpose of the Securities Act 1933 is to require that investors receive adequate information regarding securities that are offered for public sales, to eliminate ‘fraud’, ‘misrepresentations’ and ‘deceit’. Disclosure of important financial information is called for when a company seeks to register its securities. All securities listed on the U.S stock must be registered with the SEC other than:

Registration Statement: The Securities Act of 1933 requires that an ‘effective’ registration statement is filed with Securities and Exchange Commission (SEC), before securities may be offered for sale. Once the Registration Statement is complete, the ‘waiting period’ (the time between the initial filing of the registration statement and the effective date) in the U.S. is last between 30 to 45 days.

Board of Directors: The Company’s Board of Directors must consist of both its executives and independent members.

For a public company, the Board of Directors must consist of the majority of independent directors within 12 months of the

Initial Public Offering. One of the Board of Directors must be a financial expert who will also be a part of the auditing
committee.

Audit Committee: This committee introduces by both US national exchange companies and the SEC is crucial and ensures investor’s confidence in investing in the U.S listed stocks. The financial expert must all of the following characteristics:

Each of the other audit committee members must be independent. However, for companies issuing IPO, the company is required to have at least one independent member and the majority of independent members within 90 days of the IPO
completion.

The Sarbanes- Oxley Act requires the audit committee be directly responsible for the appointment, compensation, and oversight of independent registered public accounting firm, including the resolution of any disagreements between management and the independent registered public accounting firm NASDAQ is the world’s largest stock exchange company. To list on the NASDAQ Stock Market, a company is required to
meet certain quantitative and qualitative requirements, both initial and continued. The standards are designed to facilitate capital formation for companies worldwide and to protect prospective investors.

The three NASDAQ stock markets are NASDAQ Global Select Market, NASDAQ Global Market and NASDAQ Capital Market.

INITIAL LISTING- THE NASDAQ GLOBAL SELECT MARKET Companies must meet all the criteria under at least ONE of the financial standards and the applicable liquidity requirements.

Private offering to a limited number of persons or institutions
Offerings of limited size
Intrastate offerings; and
Securities of municipals, state and federal governments
An understanding of the general accepted accounting principles and financial statements
The ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves
Experience preparing auditing, analysing or evaluating financial statements that present a breadth and level of complexity of issues that can reasonably be expected to be raised by the company financial statements, or experience actively-supervising one or more persons engaged in such activities
An understanding of internal control over financial reporting; and
An understanding of audit committee functions

The NASDAQ Quantitative listing requirement is to ensure that companies have reached a sufficient level of maturity prior
to listing

INITIAL LISTING- THE NASDAQ GLOBAL MARKET
Companies must meet all the criteria under at least ONE of the three standards below

INITIAL LISTING- THE NASDAQ CAPITAL MARKET

Companies must meet all the criteria under at least ONE of the three standards below

Notes

NYSE Euronext is another world leading and the most liquid equities exchange group. To qualify for listing, companies
must meet all requirements in both Distribution and Financials criteria.

MM- millions
The above requirements apply to all companies other than closed-end management companies.
Publicly held shares is defined total shares outstanding, less any shares held directly or indirectly by officers, directors or any person who is a beneficial owner of more than 10% of total shares outstanding of the company
Round Lot holders are shareholders of 100 or more shares.
‘Listed securities’ are securities on a national securities exchange including NASDAQ
For an update of listing requirements, please visit www.nasdaq.com
MM- millions
For an update of listing requirements, please visit www.nyse.com

Company FAQs

What is an IPO?

An initial public offering (IPO) is a company’s first equity issue made available to the public, also called an unseasoned new issue.

What is an underwriter?

Investment firms that act as intermediaries between a company selling securities and the investing public.

What do underwriters do?

Underwriters perform services such as the following for corporate issuers:

Formulating the method used to issue the securities
Pricing the new securities
Selling the new securities

Who decides the price band?

The underwriting firm will decide the price band. Determining the correct offering price is the most difficult thing an
underwriter must do for an IPO.

What challenges appear when determining the price band?

The issuing firm faces a potential cost if the offering price is set too high or too low. If the issue is prices too high, it may be unsuccessful and have to be withdrawn. If the issue is priced below the true market value, the issuer’s existing
shareholders will experience an opportunity loss then they sell their shares for less than they are worth.

What is the Green Shoe Provision?

A contract provision giving the underwriter the option to purchase additional shares from the issuer at the offering price,
also called the overallotment option.

What is a lock-up period?

The part of the underwriting contract that specifies how long insiders must wait after an IPO, before they can sell stocks.

What is the SEC?

The Security and Exchange Commission (SEC) is an institution created by the US Congress to regulate the securities
market and protect investors’ interest. The SEC also monitors and regulates the market for corporate takeovers.
What is a registration statement?

A statement filed with the SEC that discloses all material information concerning the corporation making a public offering.

When is an M&A, rather than an IPO, a more appropriate way?

As an exit strategy, selling a company, rather than taking it public, offers many advantages. One important reason is that
strategic buyers are often willing to pay more than public markets for a specific company - because of the potential
synergies that can be realized after the integration process. Additionally, companies who are looking for direct liquidity may prefer the M&A because the owners are not subject to a lock-up period, which will force him to hold its stocks during a specific time. Furthermore, companies involved in mergers and acquisitions (M&A) are not required to adhere with SOX
compliance rules.

What are the ways for a firm to obtain capital?

All firms must at varying time, obtain capital. To do so, a firm must either borrow the money (debt financing), sell a portion
of the firm (equity financing), or both. How a firm raises capital depends a great deal on the size of the firm, its life cycle
stage, and its growth prospects.

What makes it better way to go listed in United States rather in Mainland China?

The main advantages of going public in the US are as follows:

What’s the difference between NYSE exchange and NASDAQ?

There are two fundamental differences between NYSE and NASDAQ:

On the NYSE, all trades occur on a physical place, on the trading floor. The NASDAQ, on the other hand, is a computer network and has no physical location where the trading takes place.
The NASDAQ is a dealer’s market. Market participants are buying and selling to each through a dealer. The NYSE is an auction market. Individuals are typically buying and selling to each other through an auction process.

What are the listing requirements for NASDAQ? How much revenue you need to have and how many years you
need to be in business to go public in United States?

General listing requirements for all companies

Listing Standard No. 1

For the prior three years of the listing, the company must have aggregate pre-tax earnings of at least $11M, and at least
$2.2M in the prior two years. In addition, none of the previous three years can have a recorded a loss.

Listing Standard No. 2

For the past three years, the company must have a minimum cash flow of at least $27.5M, without negative cash flows.
Furthermore, its average market capitalization for the prior 12 months must be at least $550M. In addition, revenues in the
previous fiscal year must have been at least $110M.

Listing Standard No. 3

If the average market capitalization of the company is at least $850M, and the revenue over the previous fiscal year was atleast $90M, the company can be exempted from the cash flow requirement of Listing

Standard No. 2.

What is Sarbanes-Oxley Act?

The Sarbane-Oxley Act of 2002 (SOX) is a federal law enacted by by the U.S. congress in 2002 to respond to corporate
and accounting scandals in the early 2000s and protect investors from fraudulent accounting activities by corporations.

How does SOX affect the company during the IPO process?

The SOX dictates stringent and voluminous procedures throughout an organization. Complying with SOX has thus become very expensive and burdensome for many companies. Especially small and medium sized companies often do not have enough resources to support the additional administrative costs associated with a public listing.